Dell Computers invests excess cash balances overnight in a London bank to earn a higher interest rate than it could earn in a New York bank. Dell is most likely making a(n) ________.
A) international currency investment
B) short-term portfolio investment
C) long-term portfolio investment
D) foreign direct investment

Question

Quizplus · Accepted Answer

Dell Computers is engaging in a short-term portfolio investment by placing excess cash in a London bank overnight to earn interest. This is a temporary investment aimed at earning returns on idle cash, rather than a long-term commitment or a direct investment in foreign operations.

Dell Computers Invests Excess Cash Balances Overnight in a London